Cambodia and Vietnam reiterate their pledge to bolster and deepen trade and investment ties as Customs (GDCE) reported that January-February bilateral export flows breached the $1 billion mark for the first time ever.
The vows were made during a meeting between Ministry of Commerce secretary of state Kem Sithan – as acting commerce minister – and Chu Thang Trung, deputy director-general of the Vietnamese Ministry of Industry and Trade’s Trade Remedies Authority, at the commerce ministry on March 23, according to a statement.
A primary goal of Trung’s visit to Cambodia was to foster stronger cooperation between his ministry and the Kingdom to support and advance bilateral trade, said the statement issued by the commerce ministry.
Trung briefed Sithan on his travels across the Kingdom to industrial facilities tied to packing, storage and exportation as well as business-owned plantations and agricultural technology demonstrations, along with his discussions with officials from the General Department of Trade Support Services concerning certificates of origin (CO), it said.
Sithan expresses hope that the visit will contribute to strengthening cooperation between the two ministries, as well as improving effectiveness in trade among the two countries, the statement added.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, commented to The Post on March 26 that the Kingdom’s trade volumes with a slew of nations have dipped in recent months amid the global economic downturn.
However, Cambodia-Vietnam trade has remained in positive growth territory on the whole, supported by solid diplomatic ties, a shared border, and constant enlargement in the Kingdom’s overall production capacity, particularly in the agriculture domain, he said.
“The volume of trade between the two nations will steadily expand based on geographical considerations and diplomatic ties,” Vanak predicted.
According to the GDCE, the Cambodia-Vietnam merchandise trade totalled $1.085 billion in the first two months of 2023, representing a 14.17 per cent rise over the same time last year, and a colossal 730.7 per cent jump from the corresponding 2015 period.
Cambodian exports to and imports from Vietnam came to $491.180 million and $593.557 million, respectively, up 36.12 per cent and 0.73 per cent year-on-year, narrowing the Kingdom’s trade deficit with its neighbour by 55.18 per cent on a yearly basis to $102.377 million.
Vanak explained that Vietnam’s overall production capacity – which he stressed is undeniably greater than Cambodia’s – coupled with its larger economy and population, has kept the trade balance tilted in favour of the Socialist Republic.
Narrowing the trade deficit will require the local community to put more efforts behind items with significant potential to command great demand on the Vietnamese market, he suggested.
GDCE statistics show that the Cambodia-Vietnam merchandise trade clocked in at $6.136 billion in 2022, up 19.64 per cent from 2021 and up 453.96 per cent from 2015.
Cambodian exports to and imports from Vietnam amounted to $2.169 billion and $3.967 billion, respectively, up 9.25 per cent and 26.20 per cent on $1.985 billion and $3.144 billion in 2021, expanding the Kingdom’s trade deficit with its neighbour by 55.25 per cent on a yearly basis to $1.799 billion.
Statistical discrepancies and asymmetries in trade figures are common between different sources, however, with the Ministry of Foreign Affairs and International Cooperation putting the 2022 two-way trade volume at a whopping $10.57 billion – a whole 72 per cent higher than the GDCE value – which it recorded as an increase of 10.88 per cent from $9.5 billion in 2021.
Regardless, no breakdown was immediately available of the specific items traded between Cambodia and Vietnam for any interval during the 2022-2023 period.
However, according to Trading Economics, “rubbers” and “mineral fuels, oils, distillation products” – or chapters 40 and 27 of the Harmonised System (HS) – were Cambodia’s top categories of exports to and imports from Vietnam, respectively, in both 2020 and 2021.
Expressing some proportions by their possible ranges of values so as to account for rounding errors, “rubbers” and “mineral fuels, oils, distillation products” accounted for 56.93 per cent and 22.92-23.00 per cent of their corresponding 2021 totals – compared to 52.341-52.346 per cent and 21.44-21.53 per cent in 2020, figures from the website suggest.